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126 Cards in this Set

one method of characterizing and allocating the assets and debts of a married couple. How to divide upon divorce and death.

Community Property Definition

include Washington, Idaho, Nevada, new Mexico, California, and Louisiana.

Community Property Jurisdictions

a. Separate Property: All the property owned before marriage or acquired thereafter by gift, bequest, device, or descent.
b. Community Property: Is essentially all the property that is produced by the labor of either spouse during marriage. What ever the husband or wife earned during the marriage.

Assets and Debts are Divided into Two Categories

surviving spouse owns all of the community property, his and hers and all of that by the decease. And the decedents get what ever is left, which is there share of the separate property.

Termination by death of a spouse: Intestate

Surviving spouse has rights to half of the community property and their share of the separate property which is all their own and whatever ever the person who died left. The Husband dies and leaves a nephew ¾ of the community property. If this happens the surviving spouse can elect to obtain the ½ of the community property that they are entitled to or they can elect to take what is left to them in the will. Decedents estate then gets whatever is left.

Termination by death of a spouse: Will

a. Each spouse gets half of the community property and all of there separate property. In California it is 50/50.

Divorce

California's Two Categories of Marital Property

All property, real or personal, wherever situated, acquired by a national person during the marriage while domiciled in this state is community property.

California Family Code Section 760 (cp)

California's Two Categories of Marital Property

i. All property owned by person before marriage
ii. All property acquired by person after marriage by gift, bequest, devise or descent.
iii. Rents, issues and profits flowing from separate property.
iv. Property acquired in exchange for separate property.

CA family code Section 770: (sp)

Presumption
I. Definition: It is an assumption or conclusion that the law either allows to be made or requires to be drawn. Can be conclusive or rebuttable. Allows certain facts to be established without evidentiary proof. If you establish a preliminary fact then a presumption can be drawn from that.

Presumption Definition

Presumption

II. Lynam v. Vorwerk Pg. 159: Facts: Administrator for deceased husband sought to have joint savings account with wife declared as community property. What does the court say about this: The husband and wife are in possession of the property during marriage, raises a reputable presumption that the property is community property. There is no reputable evidence

Presumption Case Law

Presumption

III. Fidelity & Causality Company v. Mahoney Pg. 160: Facts: Father purchased an airplane travel accident insurance policy from the plaintiff insurance company and mailed it to the beneficiary, his son, he then dies on a plane, but his wife made claim for ½ of the insurance policy proceeds, claiming that the insurance was purchased with the community funds. She claims that community property money cannot be spent without her consent. Rule: while there is a presumption that property acquired after marriage other than by gift, devise, or descent, is community property, said presumption is of less weight when a short-term marriage is involved and there is no presumption as to when property was acquired.

Presumption Case Law

Presumption

IV. BOTH OF THE ABOVE CASES ARE CURRENT PRECEDENT (Argue Both)
a. Presumption 1 (Rule): Property acquired during marriage is presumed to be community property.
b. Presumption 2 (Rule): Lynam - Proof of possession of property during marriage gives rise to the presumption that the property was acquired during marriage. Applied to long-term marriages.
c. Presumption 3 (Rule): Mahoney - proof of possession is insufficient, community property claimant must establish acquisition of the property during marriage. Presumption is applied in shorter marriages.
i. These are rebuttable presumptions that can be overcome with evidence. (Remember this).

Presumption Case Law

Joint Title

A. Do not have the power to give away your spouses community property to yourself as separate property. But, you can give it to your wife or spouse as separate property.

How taking property title affects the presumption that property acquired during marriage is community property.

Joint Title

H and W each own half undivided interest with the right of survivorship.
a. Created by specific language

A married couple can hold joint title in four ways:

Jiont Tenancy

Joint Title

H and W own equal proportionate interest with no right of survivorship.
a. Created by specific language or an unspecified grant

A married couple can hold title in four ways:

Tenancy in Common

Joint Title

H and W own a half interest and the right of survivorship depends on whether the decedent died testate or intestate. Testate surviving spouse owns half interest or the elected share. Intestate owns the decedents half as well as her own. Created by specific language

A married couple can hold joint title in four ways:

Community Property

Joint Title

the same as community property except that even if the decedent dies testate the surviving spouse owns the decedents half as well as her own. Created by specific language

a married couple can hold title in 4 ways:

Community property with a right of survivorship

Married woman's Special presumption

A. Despite the general presumption that property acquired during marriage is presumed to be community property. When written title is placed in a woman’s name alone before 1975 that property is presumptively the married woman’s separate property.

Married Woman's Special presumption

Married Woman's Special Presumption

a. Section (a): when the title is in the married woman’s name alone presumed the woman’s separate property. Section (b): when title is taken by a married woman and any other person including by the way the husband it is presumed to be held by them as tenants in common.
- Dunn v. Mullan Pg. 170: Facts: husband and wife took title together and the wife died the day after the husband. Court Says: They took title jointly a married woman and any other person, therefore they are tenants in common. Because they are tenants in common the wife owns her separate property and the husband community property, therefore upon the husbands death the wife gets her half plus her half of the community property.
b. Section (c) (after Dunn case) if you take title and describe yourself as husband and wife the property is presumed to be community property

Family code section 803 - acquisitiosn pre 1975

Married woman's Special Presumption:

a. Otherwise unspecified grant created community property

Acquisitions post 1975

Married Woman's Special Presumption:

A. Facts: Real estate was purchased from joint earnings of husband (d) and wife (p). However, title was taken in name of wife alone, who brought suit to establish that the property was her separate property.
B. RULE: Where property deeded t o a spouse is purchased with community funds, a rebuttable presumption arises that such property is the separate property of that spouse. Can get over the presumption that H and W intended the property to be community property. Also that the husband had some other motive then giving a gift.

Rebuttal for Married woman's special presumption case law

Married Woman's Special Presumption:

A. Marriage of Lucas Pg. 182: Facts: H and W purchase a home using both the wife’s separate property fund and the community property funds and they took title as join tenants. Court Says: It is presumed that the contribution is a gift to the community property. The presumption is distinguishable that property acquired during marriage is presumed to be community property. It is the title that determines how the property will be held. It is not enough to show that the money came from the separate property, but also have to show that the party intended to retain it as separate property. Have to show that there was an agreement or understanding to the contrary fact of it being community property.

Separate Contributions to Jointly Titled Property Case Law

Married Woman's Special presumption:
a. Class Rule: All property held by spouses in joint equal form is presumed to be community property for purposes of distribution at divorce or legal separation. However at divorce any separate property contributions to the acquisition of property will be reimbursed to the separate property contributor without interest or appreciation.

Separate Contributions to Jiontly Titled Property:

Anti Lucas Law: Class rule

Married woman's special presumption:

By a written agreement that the property was tended to remain separate property.
c. Both Lucas and anti-Lucas only apply to situations where title is held jointly and equally. Also don’t apply to joint title bank accounts.

Seperate contributions to jointly titled propert: Anti Lucas Law:

how to overcome the presumption

Marrid woman's special presumption:

A. General rule: If you have Community Property and Separate Property used to buy some asset, then Cp and Sp have a proportional ownership interest
1. Ex. If H and W buy a vase and they use $50 of SP and $50 of CP, then the ownership of the vase is half and half. If the vase is sold for $300, then SP gets $150 and CP gets $150. Proportionality includes increase in value.

Credit Acquisitions

Married woman's special presumption:

B. Gudelj v. Gudelj: Facts: Mr. Gudelj (d) purchased a one-quarter interest in a cleaners with $1,500 in cash and a note for $10,000. Court Says: $1,500 was SP because it was from the business prior to marriage. He traced it. The SC held that the $10k was CP because money acquired on credit during marriage is presumed to be CP. H could overcome presumption by showing that the lender was only relying on H’s separate property when agreeing to lend the money.

Credit Acquisitions Case Law

Married woman's special presumption:

There is a presumption that loan proceeds acquired during the marriage is CP, and to overcome it, you have to show that the lender relied primarily on separate property when making the loan.

Credit Acquisitions: Intent of hte lender test

Married woman's special presumption:

D. Ford v. Ford: Facts: H borrowed money for the farms that H and brother owned, but H and W signed the promissory note. Payments were made by farm income, and trial court found W farm was CP. The Court says that W’s execution on the note and mortgage could not affect the rights of the parties.

credit acquisitions case law

married woman's special presumption:

E. Marriage of Grinius: Facts: H and W bought restaurant. Two loans were taken out. H signed the SBA note and both signed the bank note. The Court Says: The Court restated the intent of the lender test. The Court changed the test by showing that the lender solely relied on SP. The Court held that H did not overcome presumption.

credit acquisitions case law

Married woman's special presumption:

A. Vieux v. Vieux: Facts: Prior to his marriage, Mr. Vieux (d) executed an installment contract to purchase real property and, after this marriage, he used some community property funds to pay installments on this contract. Court Says: That Community Property is entitled to an interest in such property in that proportion that community funds were used.

CP contributions that enhance the vlaue of SP case law

married woman's special presumption:

B. Marriage of Moore: Facts: W purchased property prior to marriage. H argued that community property payments made during the course of the marriage, the trail court erred in not giving credit for the amount paid for interest, taxes, and insurance on such property during the marriage. Court Says: when we talk about proportional ownership interest, we only talk about payments that reduce the principal. Interest, taxes, and insurance payments are not included in the principal.

community property contributions that enahnce the value of seperate property case law

community property contributions that enhane the value of seperate preoprty example.

Improvements

i. When separate property is used to improve community property the separate property is entitled to simple reimbursement (without interest or appreciation).
ii. The right of reimbursement is limited to the value of the property.
iii. Modern cases have held that community property is entitled to either reimbursement or a pro rata interest in the property which ever is more.

use of seperate property to improve the community property

improvements

i. Marriage of Warren Pg. 211: Facts: Wife was using 38k of community property funds to improve her own separate property. The improvements increased the value of the woman’s separate property. Both parties stipulated that there was no agreement that the community property funds were going to be a gift. Husband wanted the 38k to be redistributed into community property. RULE: in the absence of a contrary agreement, the use of community funds to improve the separate property of one spouse does not alter the separate character of the property. Cannot give a gift to yourself.

i. Need a witnessed ceremony.
ii. Needs to be duly licensed
iii. Recorded or registered

Formal legal requirements

Domestic Partnerships:

a. In California there is no common law marriage therefore there is no community property. But, California does recognizes marriages validly contracted in other states. So for example, if a couple enters into a lawful common law marriage while residing in another state California will recognize that marriage as lawful.

domestic partnership
a. Marriage of Baragry Pg. 481: Facts: Husband and wife get in a fight and the husband moves out to live on his boat. The he moves in with his 28yr old girlfriend. The husband maintains continuous and frequent contact with the family. RULE: The fact that a husband and wife live in separate residence is not determinative as to whether the husband and wife are living separate and apart, but rather the question is whether the parties conduct evidences a complete and final break in the marital relationship. There needs to be an intent to discontinue.

End of the economic community

Domestic Partnership

Anything acquired up until the final break is community property.

end of the economic community:

Reconciliation

Domestic Partnership:

Are not lawfully married but have a good faith belief that they are lawfully married.

Putative Spouses

Domestic Partnership:

Would a reasonable person believe that they were married. The objective good faith belief is usually satisfied if the marriage was duly licensed and registered. If you got a formal marriage we will satisfy this requirement.

Putative Spouse:

Good Faith Belief - Objectively Reasonable

Domestic Partnership:

Have to show that the putative spouse really believed that the marriage was valid.

Putative Spouse:

Good Faith Belief - Subjectively Reasonable

domestic partnership:

once a spouse learns that the marriage is invalid, then they lose their protective status.

Putative Spouse:

California

domestic partnership:

if you didn't get your license

putative spouse:

cause of defective marriage

domestic partnership:

e. Wagner Pg. 439: Facts: Husband and wife exchange personal marriage vows. The husband is killed and the wife sues for wrongful death claiming putative spouse status. Court Says: That you need an objective and subjective good faith belief that you were married. Trial court established that the wife did have the good faith belief.

putative spouse case law

domestic partnership:

i. Property acquired during a putative marriage is called a Quasi-Marital property. It is treated essentially as community property

right of Putative spouse

domstice partnerships:

i. Estate of Vargas Pg. 437: Facts: Vargas was married to two women at the same time, and the probate court divided the assets of his estate equally between his legal wife and his putative spouse. RULE: An innocent participant who has duly solemnized a matrimonial union which is void because of some infirmity acquires the status of putative spouse.

competing claims case law

domestic partnership

a. California Family Code Section 300: a personal relation arising out of a civil contract between a man and a woman. California does not recognize same sex marriages.

same sex domestic relatinoships:

California Family Code Section 300

domestic partnership

1996 California passed this prop. That says that California will not recognize same sex marriages that were contracted elsewhere.

same sex domestic relationships:

Prop 22

Unmarried cohabitation

a. Marvin v. Marvin Pg. 456?????????????????: Facts: Michelle Marvin (p) maintained that she and Lee Marvin (d) had entered into an express and/or implied agreement to share equally in all property acquired while they lived together. They lived together for 7 years and all property was in his name. Rule: The court said that these agreements are unenforceable only to the extent that they explicitly rest on the meretricious sexual services. Family law does not govern the distribution of property during a non-marital relationship, but should enforce express contracts.

What rights to unmarried cohabitants upon dissolution or death

Prenups

a. Marvin v. Marvin Pg. 456?????????????????: Facts: Michelle Marvin (p) maintained that she and Lee Marvin (d) had entered into an express and/or implied agreement to share equally in all property acquired while they lived together. They lived together for 7 years and all property was in his name. Rule: The court said that these agreements are unenforceable only to the extent that they explicitly rest on the meretricious sexual services. Family law does not govern the distribution of property during a non-marital relationship, but should enforce express contracts.

prenups definition

prenups

III. Marriage of Dawley Pg. 82: Facts: Husband and wife who maintained an intimate relationship for 3 years and at some point they were both contemplating separation and the wife discovers that she is pregnant. She is scared that a non-marital pregnancy will jeopardize her job. They decide both fully knowing to have a temporary marriage. That looks like a pretty good solution for there troubles. So, he agrees to the prenup. They go ahead and get divorced. RULE: the prenup is valid, even if at the time of its execution the parties anticipated the early dissolution of their marriage, so long as the terms of the agreement itself do not promote divorce.

prenups case law

prenups:

IV. Marriage of Noghrey Pg. 88: Facts: husband and wife sign a prenup agreement that in an event of a divorce the husband will give the wife the house, 500k or half of the assets which ever was greater. Seven and a half months later she files for divorce. RULE: contracts which facilitate divorce or separation by providing for a settlement only in the event of such an occurrence are void as against public policy.

prenups case law

prenups:

i. Agree before we get married that you will not have to pay me spousal support anytime. Traditionally spousal support waiver clauses were unenforceable per se.

spousal support waiver

prenups

The Marriage of Bonds Pg. 96: Fact: They were getting ready to go to Vegas to get married, two days before they went to Vegas Barry’s attorney brings a prenup and they signed it. The wife contended the enforceability of the prenup because she didn’t really know what was going on and just signed it. Court Says: the court upholds the prenup saying that there was substantial evidence that the wife voluntarily agreed to the prenup.

spousal support waiver case law

prenups:

a. Rule: Prenuptial agreements have to be voluntary. To be enforceable the prenup must be executed voluntarily. The court must find independent council (each party represented) or such party has waived the right after being advised to do so in a separate writing. Each party must have at least 7 days to seek independent council and if a party is unrepresented that party must be fully informed in writing of the terms and must be proficient in the language. There can be no duress, fraud, undue influence, and the court may consider any other factors if deems relevant.

california prenuptial agreement act rule

prenups:

a prenup can be rendered unenforceable if the party can show that it was unconscionable when executed and the party did not have and could not have had adequate knowledge of the assets of the other party and did not waive the right to disclosure of those assets.

california prenuption agreement act:

unconscionabiliy coupled with Non Dislcosure

prenups:

These are not enforceable if the party did not have independent council or the enforcement would be unconscionable at the time of enforcement as apposed to execution.

california prenuption agreement act:

special rules for spousal support waiver clauses

prenups:

These are not enforceable if the party did not have independent council or the enforcement would be unconscionable at the time of enforcement as apposed to execution.

Statute of Frauds Rule

prenups:
a promise is executory when it has not been fulfilled. Execution of a promise substitutes a writing because like a writing it proves that a promise has been made.

Statute Frauds: Two Exceptions:

Executed Oral Promise

prenups:

1. Frias Case: Fact: Man orally promised to make his wife the beneficiary after they are married. Later he changes his mind and names the children from his previous marriage beneficiaries. After the death the wife was able to enforce the executory promise because it had been executed. Court Says: Reason for statute of frauds is that some agreements need evidence that there was really an agreement. Arguably the fact that a promise was fulfilled was better evidence.

Statute of Frauds: Two Exceptions

Exectured Oral Promise Case

Prenups:

a promissory is estopped from asserting the statue of frauds when the promise has relied on his or her detriment on an oral premarital agreement.
1. Estate of Sheldon Case: Rule:The husband’s oral premarital promise was asserted because she relied on his promise to her detriment.

Statute of Frauds: Two Exceptions:

Estoppel to Assert the Statute of Frauds

Transmutation:

a. Estate of Raphael Pg. 113: Facts: all the property was transmitted during marriage. Court Says: An oral agreement is ok and you can show evidence of the oral agreement by looking at the way the parties dealt with the property. Look at the acts and conduct of the parties in dealing with the property.

Before 1/1/85 case law

transmutation:

b. Marriage of Jafeman Pg. 116
i. Class Synthesized rule of Raphael and Jafeman: You can show evidence of an oral agreement through the way that the parties acted toward there property, but testimony evidence by one party alone is not sufficient.

Before 1/1/85 case law

transmutation:

Evidence of oral agreement more then just testimony. For post 85 we need a writing and we need an express declaration.

Post 1/1/85 Section Code

transmutation:

b. Estate of McDonald Pg. 121: Facts: Husband and wife who both have children from previous marriage when they get married. Husband receives a disbursement from pension which the wife has a community property interest in. Wife then signed a consent that the husband’s trust be the beneficiary. Court Says: although no specific language is required, expressed declaration must include some writing expressly stating that the characterization of the ownership of the property is changing. Rule: A transmutation of real or personal property is only valid when made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.

post 1/1/85 case law

transmutation

i. The writing requirement does not extend to gifts between spouses of items of a personal nature that are principally used by the spouse to whom the gift was made that are insubstantial in light of the financial circumstances of the marriage. (jewelry, furniture, etc.).

post 1/1/85

exception to rule (personal gift exception)

Transmutation:

A statement in a will as to the character of property is not admissible as evidence of a transmutation of the property in any proceeding commenced before the death of the testator

post 1/1/85

statements of will not admissible

management and control of CP:

Husband and Wife have equal management control. Either spouse acting alone may buy, spend, and encumber all of the community property. This is only during the lifetime.

Management and control of community property General Rule

management and control of cp:

Both spouses must execute any instrument by which community real property is sold, conveyed, encumbered, or leased for more then a year.

Exceptions: Real Property General Rule

managment and control of community property:

If community property is in title in one spouse’s name and a third party buys property, then such transfers are presumed valid. The Non Consenting spouse may overcome this presumption by showing that he or she in no way consented to the transfer. You can void the transfer. If you show, then you can void the transfer after you give the money back. There is a special one-year statute of limitations on an action on a non-consenting spouse to void the transfer.

exception real property:

one spouse on title

management and control of community property:

3. Lezine v. Security Pacific Financial Services Pg. 386: Facts: Husband forges a signature to use community property to secure a loan. Wife divorces him. Court Says: that generally the community estate is liable to debts incurred by either spouse during marriage. In this case the debt was incurred during marriage and the property is community property.

Exceptions real property case law

management and control of cp:

the bank is held harmless by all claims by the depositor’s spouse. The legal remedy for this is that the other spouse can add their name to the account.

exceptions personal property:

bank accounts

management and control of cp:

a spouse who is operating has primary management and control of the business. The spouse may act alone, but must give prior written notice of sale or other disposition of all or substantially all use of the business. Failure to give notice does not void the transfer.
a. Another section in the code states that you have a remedy against your spouse limited to the circumstances where the managing spouse behavior has substantially impaired his/her half of the community property.

exceptions personal property:

Business Exception

management and control of cp:

Generally a spouse may not sell, convey or encumber community property used as a family dwelling or community household furnishings or the clothing of the spouse or minor children without written consent. The non-consenting spouse may void such transfers at any time during or after the marriage without returning consideration to the transferee.

exceptions personal property:

personal belongings exception

management and control of cp:

Generally a spouse may not make a gift of community property without the written consent of another spouse.
1. Can exchange community property for fair and reasonable value.
2. Such gifts are not void but voidable. Giving away the community property.

exceptions general limitations on managerial power:

Gift of community property

management and control of cp:

1. Spreckels v. Spreckels Pg. 400: Facts: During the marriage the person gave money away. The wife did not consent. The wife did not consent and we want our share of this community property. Court Says: that a wife’s consent to the husband’s gifts may be given after the gifts have been made in the form of ratification. Once the gift has been ratified the spouse’s power to void the gift ceases. If you have a gift without consent it becomes voidable, and the non-consenting spouse can void it, but once it ratifies the non-consenting spouses power to void ceases to be.

exceptions general limitations on managerial power:

ratification case law

management and control of cp:
During the donor’s lifetime, the non-consenting spouse may revoke entirely. After the death of the donor the unauthorized gift is considered an authorized testamentary gift of half the spouses property.

exceptions: general limitations on managerial power:

avoidance

management and control of cp:

1. Fields v. Michael Pg. 405: Facts: Before death husband wrongfully made gifts of community property without the wife’s consent. Rule: when a husband makes an unauthorized gift of community property to a third party donee, his wife may bring an action after his death either against the donee to recover one half of the value of the gift or against the husband’s estate to recover one half of the value of the gift.

exceptoins: general lmitations on managerial power:

avoidance case law

managment and control of cp:

1. Estate of Bray: Facts: The husband without the wife’s consent made an account with the son and made bonds together. The wife says that these are unauthorized gifts and the son says that the community made fair and reasonable value in the form of his services. Court Says: that there is no evidence that the husband intended the property to be compensation for services.

exceptions: general limiations on managerial power:

Exchange property for fair and equal value case law

management and control of cp:

1. General Rule: Spouses owe a fiduciary duty to each other.
2. Fiduciary Duty: Continues until the community property is divide by the parties or the court. Comment pg. 423
3. Marriage of Schultz: Court Says: A breach of fiduciary duty then not getting half. Negligence is not a breach of fiduciary duty. The breach of fiduciary duty must amount to deliberate misappropriation or gross mishandling.

exception: general limitations on managerial power:

fiduciary duty of spouses

tracing:

Generally when separate property funds and community property funds are commingled into a single account at divorce or death the owner of the separate property funds may attempt to trace the funds to a separate property source. The property may change form, but not character.

tracing definition

tracing:

when you commingle separate and community property funds you are running the risk that you won’t sufficiently trace the separate property source.

tracing problem

tracing:

Available community property funds are presumed to have been used to pay family expenses therefore separate property funds are deemed to have been used to pay for the family expenses only when the community property funds have been exhausted. When separate property funds are used to pay family expenses there is no reimbursement right unless the parties have agreed otherwise.

family expense presumption

tracing:

a. See v. See Pg. 217: Facts: Husband and wife get a divorce. During the marriage the husband commingled his separate property with community property and at divorce he tried to push an accounting method onto the court to get his separate property back. Court Says: that you have to characterize the property as separate property or community property at the time of acquisition.

family expense presumption case law

tracing:

way to determine what is separate from community property. LOOK IT UP IN BARBRI.

family expense presumption: exhaustion method

tracing:

b. Estate of Clark Pg. 139: Facts: Husband has three children prior to the marriage and has oil interest which he gifts to the interest of his children. One of the children die. When the husband died he left a will giving the bulk of his estate to his children and the wife elects to take on the community property rather then the will and claims that the sons estate was part of the community property. Court Says: that the right to contest the will vested immediately upon the sons death and this time was two weeks before he got married since the right arose before marriage the resulting money is separate property.

onerous or lucrative acquisitions case law

tracing:

c. Andrews v. Andrews Pg. 142: Facts: The son claims an old contract with the father and mother by which the son and the sons wife would care for the mother and father in return for the parents property upon death. The son agrees and cares for the mother and father. Mother dies and the father remarries. On the fathers death it looks like the father’s second wife is contesting the existence of the contract. The second wife challenges the trail courts decision on allowing the sons wife to testify since she was an interested party. Court Says: the property if it is to go to the son is not via gift or succession but through a contract. What the court is saying is that you have this contract whereby community labor is given in exchange for the property. If community labor is given in exchange for the property what does that make for the property? Community property. Therefore the property if it would come to the son would be community property and the wife cannot testify therefore there is no evidence of a contract.

onerous or lucrative acquisitions case law

tracing:

d. Downer v. Bramet Pg. 146: Facts: Husbands employer gives the husband 1/3 interest in a ranch and the wife claims that her share of that interest in community property and husband says no it was a gift, therefore it is separate property. Court Says: it was a gift because it was a transfer of an asset without consideration. The court also says that the interest is still community property because it was given for the recognition of the husband’s services as an employer.

onerous or lucrative acquisitions case law

Business Profits:

Circumstance where one spouse brings a separate business into a marriage or uses separate property funds to purchase a business. Community property is only entitled to share in the separate property business profits when the community property contribution of labor is not insignificant. Ex: spouse brings separate business into the marriage but doesn’t spend time in managing the marriage then there is no significant community property portion therefore not entitled to a share.

Business Profits General Rule

Business Profits:

can be managing a stock portfolio or collecting rare coins. As long as significant community property labor is being contributed into the enterprise the California considers it a business.

California Law construes the Term business very broadly

Businesss Profits

Value the manager service at going market value and subtract the family expenses paid out of the business profits and this equals the community property share. (used when it is the character of the business itself for the increase in value. If you have exclusive right to import something, then use Van Kamp)
i. Ex: Husband goes into a marriage owning a separate property bakery worth 100k and he runs the business during the marriage. 10 years later the business is worth 400k. Market value salary for bakers is 30k per year. 30k a year times 10 years equals 300k. business spent 20k a year on family expenses. 20k times 10 years equals 200k. 300k – 200k we get 100k in community property. The remaining 300k are separate property.

Business Profits: 2 methods of Business Apporitionate Used:

van kamp accounting method

Business Profits

We first impute the fair rate of return (10%) on separate property and add this to the separate property principal and this give us the separate property and the remainder will be community property. (when increase is primarily because of talk or work drive of managing spouse, use Pereira).
i. Ex: 100k x 10% x 10yrs = 100k. 100k + 100k = 200k. If we add the principal we get 200k this gives us separate property therefore this means that 200k is community property.

business profits: 2 methods of business apportionate used:

Pereira method

special characterization problems;

i. Before Marriage: then separate property.
ii. During marriage: community property.
1. Exception: at divorce personal injuries are awarded entirely to the injured spouse. If the personal injury funds are commingled by the injured spouse with other community property funds then they lose the protection of that exception and they are again divided 50/50.
iii. If the injury is from a spouse, then it is always treated as the injured spouse’s separate property.

Personal injury awards:

Cause of action arises when the injury was inflicted

life insurance proceeds:

you pay a certain amount of money to get a certain amount of life insurance for a term (usually one year term). After one year you either renew it or it goes away and once it goes away there is no value.

Two types os life insurance:

Term life insurance

life insurance proceeds:
Logan Case – the proceeds are determined by how the last payment was made. For term, even if you have an uninsurable person, you are able still to renew it since term has a right of renewal. When an uninsurable spouse is able to renew because it is term, the court treats the proceeds as if it was a whole policy.

Term life insurance at divorce

life insurance proceeds:

buy your insurance and you pay your premiums and as time goes on your premiums collect into an acct which you can withdraw or borrow against.

whole life insurance

life insurance proceeds:
Cash value is community property in proportion that the community property funds were used to pay the premiums.

whle life insurance proceeds at divorce

life insurance proceeds:

they get divided up into separate property and community property in proportion to payouts. If the decedent has named someone other than spouse, then that is deemed a testamentary gift and half goes to the beneficiary and the other half goes to the spouse

proceeds at death (term and whole).

Pensions:

Retirement benefits for when you retire you get a monthly amount based on a percentage of your final salary or your highest salary. Pension funded by some combination of employee salary deductions and contributions by your employer. Pension becomes vested when the employer has completed the minimum time period designated by the employer to qualify for the pension.

Pensions

Pensions:

Pensions are classified to the extent that the right to the benefits was earned during marriage. Regardless of when the benefits are actually paid.

Pensions General rule

Pensions:

if you are earning your pension money during marriage to the extent that the pension is funded during marriage that is community property.

Deferred compensation (pensions court term)

Pensions:

some companies will allow an employee to take a cash settlement in lue of the pension benefits when the employee leaves the company. Once you come back the employer may allow you to pay back some money and reinstate your pension. But if the reinstatement happens after separation the non employee spouse has to pay there share of there reinstatement fee to receive a share of the pension benefits. Private employers can be compelled to directly pay the non employee former spouse.

Reinstatment

Disability Benefits:

Workers Compensation (receive when you are injured on a job). California treats these the same and so the umbrella term is Disability Benefits. Disability benefits are treated as wage replacement, replace regular earnings.

Disability Pay

Disability Benefits:

to the extent that disability benefits are used to replace marital earnings they are considered community property. If it replaces non-marital earnings, then separate property.

Disability Benefits General rule

Severance Pay:
I. Marriage of Wright Pg. 357: Facts: H and W separate on 6/23 and after he gets severance pay. She argues that the money is in return for past employee services. She makes this argument before it was earned during marriage therefore community property. Husband says that it is in return for future loss of earnings, therefore making it separate property. Court Says: Severance pay received by a spouse after a marital separation is the separate property of that spouse.

Severance Pay case law

Education and Training:

a. General Rule: Post marriage earnings that are the result of pre-divorced education paid for with community funds remain separate property. There is a right of reimbursement with interest. To state the reimbursement right at divorce unless the couple has signed an agreement to the contrary the community is entitled to reimbursement with interest for community funds that were; (1) used to pay for education or training; or (2) used to repay loans; and (3) the education or training has substantially enhanced the earning capacity of the spouse that received the education or training.

Professional Degrees and Licenses General Rule

Education and Training:

Post marriage earnings that are the result of pre-divorced education paid for with community funds remain separate property. There is a right of reimbursement with interest. To state the reimbursement right at divorce unless the couple has signed an agreement to the contrary the community is entitled to reimbursement with interest for community funds that were; (1) used to pay for education or training; or (2) used to repay loans; and (3) the education or training has substantially enhanced the earning capacity of the spouse that received the education or training.

Professional Degrees and Licenses

Loans from Education: general rule

Education and Training:

i. Can get reimbursed for direct cost like tuition and books.
ii. Living expenses are also reimbursable.

Professional Degree and Licenses:

What are the reimbursable Expenses

Education and Training:

i. Reimbursement may be reduced by the community when the community has already benefited from the education training by the time that the divorce comes around.
1. Less then 10 year from the payments and the divorce then it is presumed that the community has not benefited. If it is more then 10 years from the payments and the divorce then it is presumed that the community has benefited.
ii. When the education or training is offset by community funded education or training received by the other spouse.
iii. Can reduce reimbursement when training or education enables the recipient to engage in work that substantially reduces his or her need for spousal support.
1. Ex: if you got 500 a month in support but because of the legal training that you got this goes down, to that extent you can offset the reimbursement.

Equitable Defenses

Business nad Professional Goodwill:
I. Goodwill: mathematically it is the total value of the company minus the value of the physical assets. Gain good will.
II. General Rule (business goodwill): when it was generated determines whether it is community property or separate property. It is characterized as community property to the extent that it was generated during marriage.

Business and Professional goodwill

tracing:

when separate funds are in fact used to pay family expenses, a gift to the community is presumed. In other words, the separate estate has no right of reimbursement when community funds are later deposited.

two important presumptions for tracing funds in a commingled accout:

gift presumed when separate funds used to pay family expenses

tracing:

The separate property proponent may show that at the time he purchased the asset whose character is contested, the community funds in the account had already exhausted by payment of family expenses. Therefore, the asset must have been purchased with his separate funds.

two permissible tracing methods:

exhaustion method

tracing:

alternatively, the separate property proponent may show that at the time the asset was purchased (i) there was sufficient separate (as well as community) funds available, and (ii) he intended to use those separate funds to purchase a separate property asset.

two permissible tracing methods:

direct tracing

choice of law:

I. (1) When the forum court could reasonably apply the law of more then one jurisdiction. (2) When the choice of which jurisdictions law would change the outcome of the issue.

choice of law issues arise

chice of law:

a. How does California treat property acquired by married persons before they moved to California? II. How does California treat out of state real property acquired by California couples owned by them at death and divorce.

two issues

choice of law:

is any property acquired by either spouse that would have been community property had the spouse then domiciled in California at the time of acquisition. During marriage quasi community property is treated as that spouses separate property.

how does california treat property acquired by married persons before they moved to california:

Quasi community property

choice of law:

At divorce quasi community property is treated as community property. (That means that the non-acquiring spouse gets a half interest.).

how does california treat property acquired by married persons before they moved to california:

divorce

choice of law:

If the claimant spouse is domiciled in California the property at issue is still characterized as quasi community property even if the acquiring spouse never lived here.

persons before they moved to california:

divorce: claimant spouse domiciliary, acquiring spouse is not

choice of law:

distinguish between whether the property was acquired in a community property state or a common law state. Community property state quasi community property is treated as community property at death. If purchased in a non community property state then it is treated as quasi community property

how does california treat property acquired by married persons before they moved to california:

death

choice of law:

the survivor has a half interest. In that case treated like community property.

how does california treat property acquired by married persons before they moved to california:

death intestate

choice of law:

have to distinguish between survivor and decedent. Survivor gets a one half interest in decedents community property. Therefore treated like community property. The decedent does not have any interest in the survivor’s community property. In other words, unlike community property the decedent cannot will away any interest in the survivor’s community property. The survivor owns it as his or her separate property.

How does California treat property acquired by married persons before they moved to California?

death; testate

choice of law:

California courts get to decide what happens to out of state real property acquired by California couples. The Supreme Court has held that the way that they will deal with it is to treat it as community property.

How does California treat out of state real property acquired by California couples owned by them at death and divorce.

at divorce

choice of law:

California does not get to decide what happens to the property. Out of state real property acquired by California couples is probated in the state where real property is located.

how does california treat out of state real proeprty acquired by california couples owned by them at death and divorce: